Microsoft has talked about the potential for rapid Internet of Things IoT growth from sensors and simple devices for years, all while the company has been building a cloud empire and quietly acquiring companies that will help it manage these billions of cloud-connected devices.
Some analysts claim that there are already 22 billion connected devices , growing to 50 billion connected devices this year, by , or depending on which study you believe. There might be disagreement on exactly how many devices will be connected to the internet and when, but Nadella has reorganized Windows and Azure to get ready for them.
Should I call Windows Azure Edge? Microsoft will need to tread carefully if it wants to avoid such comparisons. Microsoft also faces huge challenges from competitors that also want to manage these billions of internet-connected devices. Nadella has obviously steered Microsoft in a different direction since taking over as CEO nearly six years ago.
The results were evident after just a year , and the company reorganized its Windows division nearly two years ago to prepare for a world beyond Windows. If anything, what people have come to realize is that Windows is there with a billion users, iOS is there with a billion users, and Android is there with 2 billion users. Subscribe to get the best Verge-approved tech deals of the week. Cookie banner We use cookies and other tracking technologies to improve your browsing experience on our site, show personalized content and targeted ads, analyze site traffic, and understand where our audiences come from.
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Oct 29, at AM. Author Bio Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses.
Follow him on Twitter for more updates! Image source: Getty Images. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Today every Microsoft software product is delivered using these models, including many of the cloud services mentioned above. In addition to improving on longstanding products like Office and Windows, Microsoft has also developed a number of other subscription services that have driven its business forward.
While customers still utilize downloaded, on-premise desktop applications, Dynamics is also accessible from a web browser. This removes the need to download the application and allows access from a variety of devices and locations.
The big data analytics tool has become a growing focus for the company. Microsoft has also experimented with workflow automation known more commonly as robotic process automation with its own Microsoft Flow platform. Flow allows users to automate repetitive tasks and services that can provide notifications, sync files, collect data, and more. Teams is a recent addition to the Office suite, and offers a chat and messaging service similar to that of Slack. As part of Office , Teams will also be part of Microsoft , a new subscription service.
Instead of requiring subscriptions to Windows 10, Office , and Microsoft Drive, Microsoft bundles everything into a single subscription. Offering subscriptions like this allows users to pay incrementally for products and services, eliminating the need for costly upfront expenditures. These recurring revenue streams allow Microsoft to better predict future revenue and costs. Many organizations subscribe to these services for years at a time, which provides Microsoft with a better understanding of what infrastructure will be needed to support these services, as well as how much revenue they will generate in future quarters.
This correlates with the total media mentions of enterprise and business in June The majority of enterprise product mentions are related to services like Azure, Office , or Dynamics So while Microsoft continues to innovate with new software products and services, the packaging of these services also plays an important role in the growth of the company and how they can sell to businesses around the world of any size. The term describes the transition that organizations undergo when moving from legacy systems and methods to modern technologies and solutions.
Organizations that have not already made this transition present a great opportunity for Microsoft, and digital transformation is a natural place for the company to focus on based on its expertise in the enterprise technology space.
AI and machine learning are helping Microsoft clients extract, clean, and visualize relevant data, all without the need for technical expertise. In addition, Microsoft is leveraging AI technology to improve areas like enterprise security, gaming, and advertising, among others.
Microsoft has heavily invested in artificial intelligence over the last few years. As of early December , Microsoft had already made a record high number of artificial intelligence investments for the year. Recently Microsoft has backed AI-focused companies like data anonymization company Hazy and customer journey analytics provider Cerebri AI. M12 also invested in Bonsai AI , which raised funds in May before being acquired by Microsoft corporate in June Bonsai is one example of how M12 helps source acquisition opportunities for Microsoft corporate.
Since , Microsoft has acquired 7 companies that leverage artificial intelligence in some way. In addition to the Bonsai acquisition this year, Microsoft acquired natural language processing company Semantic Machines in May. Artificial intelligence can analyze tens of millions of data points and detect anomalies much faster than human analysts. Models also improve over time as they learn from the continuous data ingestion.
Developers use these tools to add AI functionality to their own applications, without having to develop models from scratch. In addition to providing tools for developers, Microsoft also uses AI to improve its own products and internal operations.
For example, Microsoft uses AI in its data centers to reduce energy consumption. Microsoft is also using AI to gain deeper financial insight: the company plans to infuse Dynamics with AI to help customers predict future business outcomes. It has also used AI to improve security, which is a growing priority for both Microsoft and its customers.
Microsoft has also been exploring the use of AI to detect cheating in video games. When a user plays a game, the game logs behaviors like scores, rankings, and interactions with other players. These behaviors are then analyzed and deemed normal or outlying, based on collected data.
This patent is a move by Microsoft to integrate information across data silos — in this case, between a gaming platform like Xbox and a third-party game. Using machine learning, the company could analyze a large collection of unstructured data that otherwise might be inaccessible to determine whether a user is cheating.
More generally, Microsoft has been actively researching and developing new technologies that leverage artificial intelligence in some capacity. Since , Microsoft has applied for over 1, patents related to artificial intelligence or machine learning. The patent shows a digital assistant interacting with a customer and a dynamic pricing platform for digital advertisers.
AI is clearly a growing priority for the company. First, the company can monetize its AI technology by helping cloud customers implement AI into their products, as well as by implementing the technology into products of its own.
Second, Microsoft benefits from the increases in efficiency provided by AI. Reducing energy consumption in data centers with the power of artificial intelligence is a primary example. The market for AI and machine learning is hard to size, given that the technology has the potential to tackle inefficiencies across a wide array of industries.
Xbox, which has been around for nearly 2 decades, played a central role in the proliferation of online, multiplayer gaming for consoles. Xbox Live now boasts approximately 57M active users. This is one of the primary reasons that Microsoft continues to invest in Xbox.
Instead, gaming investments are focused on increasing the content available to gamers and improving the overall Xbox experience. For example, Microsoft seeks to partner with game developers to bring console exclusive titles to the Xbox platform.
Mojang was just one of many gaming acquisitions made by Microsoft since In , Microsoft has already made a record 7 gaming acquisitions. Recent acquisitions include gaming studios like Compulsion Games , Ninja Theory , Playground Games , and Undead Labs , as well as game development tools like PlayFab , which was acquired in January The most recent acquisition by Microsoft was game development studio Obsidian Entertainment.
The acquisitions of PlayFab and Havok played an important role in helping Microsoft establish Azure as an ideal cloud platform for game developers. By attracting more developers to Azure, Microsoft may also incentivize those developers to create more Xbox exclusive games — a benefit to both sides of the business.
In addition to reliable infrastructure and advanced development tools, developers and publishers look for platform reach. Microsoft is uniquely positioned to deliver a reliable and seamless service via its Azure cloud services. It has also used subscriptions to remove the burden of high upfront costs, while also keeping gamers engaged.
While Xbox Live remains the premiere Xbox subscription service, the company launched a new subscription service called Xbox Game Pass in June According to interviews with the Xbox team, this curated catalog of games looks to provide something for everyone. And Microsoft regularly adds new titles to keep the catalog relevant.
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